Fairway Crest [2004] QBCCMCmr 367 (23 July 2004)

Last Updated: 30 September 2005

REFERENCE: 0380-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	19219
Name of Scheme:	Fairway Crest
Address of Scheme:	302 College Road KARANA DOWNS QLD 4306

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Jeffrey Gilbert, the Owner(s) of lot 8

I hereby order that the application for an order declaring the proposed annual general meeting invalid is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0380-2004

"Fairway Crest" CTS 19219

Application

Fairway Crest Community Titles Scheme (Fairway Crest) is a 40 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Act’s Standard Module Regulation (Standard Module). The scheme is designed for residential purposes.

This application is by Jeffrey Gilbert, the owner of lot 8 (applicant) seeking orders against the body corporate (respondent). The applicant is seeking to declare a proposed annual general meeting invalid on the basis that a copy of the proposed 2004/5 budget was not included with the notice of meeting.

Background

On 4 May 2004 the body corporate manager sent a notice to all owners requesting that owner submit any committee nominations and motions for inclusion on the agenda for the upcoming annual general meeting. In summary, this notice provided:

We advise that the Annual General Meeting of your body corporate is to be held on site at The Resident Unit Manager’s Office, Fairway Crest, 302 College Road, Karana Downs on Thursday 12 August, 2004 at 6.00pm. The date, time and place proposed are subject to confirmation by the committee.

Under the terms of the Body Corporate & Community Management Act 1997 the nominations for committee positions and motions for agenda items must be provided to the Secretary of the Body Corporate before the end of the financial year. Your financial year ends on 31 May 2004. We then have until the end of August 2004 to hold the Annual General Meeting ("the meeting")

We enclose the following:

1. Nominations of candidates for election to the committee ...
2. Requisition for inclusion of motions on the agenda ...
3. Instructions for Nominations and Notice of Motion ...

The completed forms must be forwarded to us so that they arrive at our office on or before 31 May 2004. Any nominations or requisitions received from owners after that date cannot be included in the agenda for the annual general meeting.

Submissions

The applicant’s main submissions were to the effect that:

• Financial details relating to the management of the complex were not included with the notice;
• He had requested details but was not provided with them;
• The body corporate manager had admitted information given to his solicitor at the time of purchase was knowingly incorrect; and
• Quarterly body corporate fees fluctuate wildly without sensible reason.

The body corporate’s and body corporate manager’s main submissions were to the effect that:

• The applicant has misunderstood the call for nominations and motions (made prior to the end of financial year) as being the notice of annual general meeting. This was not the case;
• The committee met, after the end of financial year, to finalise budgets and confirm the calling of the annual general meeting. This meeting is to be held on 19 August 2004. The body corporate manager will be providing appropriate notice of this meeting along with audited financial statements and proposed budgets;
• The applicant’s statements are misleading as they infer that the present body corporate manager provided the applicant with misleading financial information. The present body corporate manager thinks that it is more likely that the applicant or his solicitor misread any information provided by the previous body corporate manager;
• The application was commenced due to a misunderstanding and lack of knowledge of procedural matters on behalf of the applicant. By making unnecessary applications, the applicant has involved the body corporate in needless expense. The committee would encourage the applicant to seek clarification of any concerns from the committee rather than make needless applications; and
• This application is frivolous and vexatious.

Decision

Annual general meetings

To avoid all owners having to physically attend annual general meetings, all motions to be voted on at the meeting have to be submitted well before the meeting is held. This enables a written voting paper to be sent with the notice of meeting which can be returned by an owner instead of, or as well as, physically attending the meeting. Under the regulations, the secretary is required to serve a notice on each lot owner requesting committee nominations and motions 3 to 6 weeks before the end of the financial year. In this case, the financial year of the scheme runs from 1 June until 31 May. The secretary would therefore need to seek motions and nominations between 3 to 6 weeks before the end of May (Standard Module 13, 41(5). Motions and nominations would need to be submitted to the secretary by the end of May (Standard Module, 13(5), 41(3)).

At least 21 days’ written notice of the annual general meeting would then need to be given, accompanied by a voting paper listing all motions to be decided at the meeting (Standard Module, 42). The meeting itself would need to be held by 31 August (Standard Module, 60) with voting papers returned to the secretary before the start of the meeting (Standard Module, 51(2)).

Budgets

The legislation includes provisions to the effect that:

• The committee must prepare proposed budgets for adoption by the body corporate at each annual general meeting (Standard Module, 94(5)); and
• Copies of proposed budgets must accompany the notice of an annual general meeting (Standard Module, 94(6)).

Findings

I have reviewed the notice sent to the applicant and it is clear that this is the notice calling for committee nominations and motions for the agenda rather than the notice of the meeting itself.

The body corporate manager has said that proposed budgets were set following the end of financial year and that these budgets will be provided to owners with the notice of meeting. This application therefore seems to be both premature and lacking in substance.

The application provided mere allegations that were not supported by the evidence and the applicant has obviously misunderstood the obligations on the body corporate outlined above. One of these allegations was that a previous body corporate manager misled the applicant with details of the sinking fund balance. This is irrelevant to the application and I make no findings in this regard.

However, there appears to be an extraordinarily high amount of contributions in arrears. I would expect that notification of the sinking fund balance would make clear the actual balance of the fund and the amount of contributions in arrears. In particular, the body corporate is required to commence proceedings to recover contributions that have been outstanding for over two years (Standard Module, 99(2)).

Overall, this application is misconceived and without substance. The application is therefore dismissed. Given that the application is dismissed on these grounds, it is necessary to consider whether the applicant should compensate the body corporate for any loss resulting from this application (Act, 270(3)). I expect that the body corporate would have been put to some additional expense in terms of the body corporate manager assisting the committee to respond to the application. It would have been preferable if the applicant had provided the body corporate with a formal written request for the information he desired before lodging this application.

In this instance, I will give the applicant the benefit of the doubt regarding his claim that he has made numerous informal requests for information. I will therefore refrain from awarding costs against the applicant. However, prior to lodging any further applications, the applicant should take care that he can demonstrate that he has made some efforts to resolve any disputes himself before lodging an application.

Order

For these reasons, the application is dismissed.